The Offshore Operators Committee (OOC) announced on June 3 the completion and success of the OOC Oil & Gas Blockchain consortium, the pilot project for water management in oil fields using Blockchain technology.
A contract signed in 2019
An announcement made in late 2019 declaring the birth of a group of 10 oil and gas giants who will lead the OOC Consortium, a blockchain-based system.
The OOC Oil & Gas Blockchain Consortium was founded to advance blockchain learning with the aim of defining frameworks and industry solutions enabled by blockchain.
The consortium was established under the umbrella of the non-profit organization: Offshore Operators Committee and offers participation on a membership basis.
The objectives of the consortium are to learn, lead and exploit blockchain technology for the oil and gas industry by evaluating the technology, exploring the benefits and applications of blockchain in the industry, including faster transactions, reduced litigation, increased safety and reduced costs. As well, facilitating the adoption of the blockchain through industry standardization of data, processes, security and compliance.
The first contract for the implementation of a pilot Blockchain in water transportation was awarded on September 12, 2019. The pilot project is the first industry-wide use of a native Blockchain network for water transportation and the consortium will harness the power of GumboNet for real-time data transparency and accuracy as well as the automation of contract payments. The pilot project is being conducted in the Bakken Shale.
For information, Data Gumbo Corp is a Houston-based technology company that developed the GumboNet Blockchain as a Service (BaaS) platform to streamline smart contracts for oil and gas.
Using the Blockchain for Water Management in Oil Fields
Ten major companies in the oil and gas market have agreed to a consortium to explore the uses of the blockchain. Specifically, this network of business partners was established to create solution frameworks and guidelines for the industry by leveraging Blockchain technology to maximize opportunities to reduce costs, improve turnaround times and eliminate litigation in any given process.
The OOC Oil & Gas Blockchain consortium consists of 10 oil and gas company members:
- Noble Energy,
- Pioneer Natural Resources,
The pilot project was conducted at the Bakken shale field in North Dakota by Data Gumbo, based in OOC and Texas, in partnership with the water disposal company Nuverra Environmental Solutions. Financed by the oil tanker Saudi Aramco, the pilot automatically measures the transport of produced water from the field survey to the payment of bills.
Rebecca Hofmann, president of the CO oil and gas block chain consortium said:
'The results of this pilot project prove that volume validations without human backroom staff can trigger automated payments to vendors, and show the potential of the blockchain to reduce costs, increase efficiency, ensure transparency and eliminate disputes in the oil and gas industry.
This is just the tip of the iceberg for the potential of the blockchain in our industry'.
Profitable results for all
The group reported that during the test, the blockchain solution automatically validated 85% of all volume measurements with an automatic validation potential of almost 100% with future improvements and a potential of 25-35% reallocation of resources compared to the current business process could be achieved for the operator and the haulage company.
Other first results of the pilot project include the reduction of the workflow of the current processes from 90-120 days to 1-7 days and 16 to 7 steps, requiring no manual intervention.
In addition, the validations automatically trigger the execution of the corresponding invoicing transactions, reducing financial risk by providing assurance that payments coincide with field activity.
According to Andrew Bruce, CEO and founder of Data Gumbo:
'It's all about businesses knowing their operating expenses and reducing them. The consortium use case has produced results that show that the blockchain can be used to identify and reduce costs. He added: 'More importantly, the results show collaboration between field operations and technology experts to create a deployable and scalable solution'.
Following the success of this project, the OOC plans to extend the use of blockchain technology to other products and services. Greg Tipton, OOC of Nuverra Environmental Solutions said:
'The pilot project also demonstrates that the oil and gas industry is embracing emerging technologies such as blockchain. We are always looking for new technologies that will streamline oilfield processes through automation, which will reduce costs for our company and our customers.
Written by Laetisia Harson project manager @Magna Numeris